At the start of employment with a brokerage firm, a securities broker may receive a substantial sum of money - frequently, well over a hundred thousand dollars - in the form of a forgivable/transitional loan. The firm and broker will execute a promissory note and loan agreement detailing the terms for paying back the money. Typically, the money lent is forgiven over a period of a years. The term may range anywhere from three (3) to nine (9) years from the start of the broker's employment. However, if the broker leaves the firm for any reason before the loan is paid in full, the entire remaining loan balance, plus interest, becomes immediately due and owing.

Disputes may arise between the firm and broker if the broker fails to pay the amount due and owing. If the dispute cannot be resolved, the firm may pursue claims against the broker in FINRA arbitration. If the firm must pursue a claim in arbitration, the note and loan usually provide that the firm is entitled to recover all amounts owed, plus reasonable attorneys’ fees, collection costs and interest from the broker. Further, FINRA may suspend or cancel the registration of a broker if the broker does not comply with an arbitration award or settlement related to an arbitration claim.

Joel Ewusiak represents securities brokerage firms and brokers in FINRA arbitration when disputes arise concerning unpaid promissory notes and forgivable/transitional loans. For more information, please contact Joel at joel@ewusiaklaw.com.